Jobless rate may be artificially low

March 6, 2013

Norway has enjoyed low official unemployment rates for years but confusion is emerging over the actual numbers of persons without work in Norway. Some economists wonder whether the current unemployment rate is actually higher than reported, since not all members of the labour force who are looking for work have applied or qualify for unemployment benefits.

Norway’s unemployment rate, according to state welfare agency NAV, now stands at just 2.7 percent, with 70,000 persons registered as without work. The latest figures released just last week show a slight increase in unemployment in February, with 500 more persons registering as unemployed with NAV.

The largest portion of unemployed are young persons in their 20s, with the lowest levels found among adults over 50. The increase was largest among those in their 30s, reported NAV. The lowest unemployment rate was found in Rogaland County in western Norway, the traditional heart of the country’s robust oil and gas industry, where only 1.8 percent of the population was registered as unemployed with NAV. The highest rates were find in Østfold and Telemark counties, with rtes of 3.6 and 3.5 percent respectively.

Surveys vs registration
Real unemployment may be higher across the board, though, with state statistics bureau SSB (Statistics Norway) showing a rise in jobless levels and a national unemployment rate of 3.6 percent, much higher than NAV’s 2.7 percent.

That’s because SSB’s figures are based on labour surveys whereas NAV’s are based on persons actually registering as unemployed and qualifying for benefits. The different methods for compiling statistics left SSB showing a rise of 11,000 in the number of permanent residents of Norway without work from September to December last year, the most recent survey period. SSB’s statistics thus showed 96,000 persons without work, compared to NAV’s 70,000.

“We have seen that (SSB’s) numbers can swing and we rely mostly on NAV,” Boye told DN, “but SSB’s numbers show that the labour market has weakened and that makes us wonder what’s the correct picture.”

Slower job growth
Boye thinks SSB and NAV need to reconcile why their numbers and the trends they show are so different. One reason for the higher SSB numbers, she said, can be that more persons are looking for work at a time of slower growth in the number of jobs on offer.

Economic growth in Norway remained “good” in the third quarter of last year, noted Boye, but the fourth quarter was “a bit worse.” She nonetheless thinks it’s “too early” for that slowdown to show much effect on employment levels.

With NAV’s unemployment figures lowest among those over 50, if could also be that not all Norwegians without salaries and looking for jobs in that age group actually register at NAV to obtain welfare benefits. Other reasons, according to DN, can be the number of persons coming right out of school who haven’t signed up with NAV but don’t have jobs yet, either. The unemployment numbers also don’t reflect underemployment in Norway, a major problem especially for highly educated and professional immigrants who nonetheless often have trouble finding work in their fields of expertise.

Labour Minister Anniken Huitfeldt is following the unemployment numbers and trends closely regardless of which method is used. Both she and Prime Minster Jens Stoltenberg are concerned about more bad news coming out of Europe that can hurt Norwegian exports and jobs.

“Even with a small increase in registered unemployment, there’s still a high degree of stability in the labour market,” Huitfeldt told news bureau NTB. “But the situation in Europe is such that we must keep an eye on this.” A top priority of the Labour-led government of which she’s a member remains job creation.